a) The cigarette tax is imposed upon any person who exercises the
privilege of engaging in business as a retailer of cigarettes in this State,
and is at the rate of 5˝ mills per cigarette sold or otherwise disposed of in
the course of that business in this State. The proceeds from this tax are paid
into the General Revenue Fund of the State Treasury.

b) In addition, the Cigarette Tax Act [35 ILCS 130] (the Act),
imposes a tax upon any person engaged in business as a retailer of cigarettes
in this State at the rate of ˝ mill per cigarette sold or otherwise disposed of
in the course of that business in this State on and after January 1, 1947, and
shall be paid into the Service Recognition Bond, Interest and Retirement Fund
until that Fund contains sufficient money to retire all bonds payable from that
Fund. Thereafter, the proceeds from the ˝ mill tax were to be paid (until July
1, 2005) into the Fair and Exposition Authority Reconstruction Fund, or as thereafter
provided in Section 29 of the Act.

c) Effective December 1, 1985, in addition to any other taxes
imposed by the Act, a tax is imposed upon any person engaged in business as a
retailer of cigarettes in this State at a rate of 4 mills per cigarette sold or
otherwise disposed of in the course of that business in this State. Of this
additional tax, $9,000,000of the moneys received under the Act shall be
paid each month into the Common School Fund. (Section 2(a) of the Act)

d) Effective July 2, 1989, in addition to any other tax
imposed by the Act, a tax is imposed upon any person engaged in business as a
retailer of cigarettes at the rate of 5 mills per cigarette sold or otherwise
disposed of in the course of such business in this State (Section 2(a) of
the Act).

e) Effective July 14, 1993, in addition to any other tax
imposed by the Act, a tax is imposed upon any person engaged in business as a
retailer of cigarettes at the rate of 7 mills per cigarette sold or otherwise
disposed of in the course of such business in this State (Section 2(a) of
the Act).

f) Effective December 15, 1997, in addition to any other tax
imposed by the Act, a tax is imposed upon any person engaged in business as a
retailer of cigarettes at the rate of 7 mills per cigarette sold or otherwise
disposed of in the course of such business in this State. All of the
monies received from this additional tax shall be paid into the Common School
Fund. (Section 2(a) of the Act)

g) Effective July 1, 2002, in addition to any other tax
imposed by the Act, a tax is imposed upon any person engaged in business as a
retailer of cigarettes at the rate of 20 mills per cigarette sold or otherwise
disposed of in the course of such business in this State.

h) The total of these rates is 29 mills per cigarette, or 58˘ on
a package of 20 cigarettes, except that, beginning July 1, 2002, the total of
these rates is 49 mills per cigarette or 98˘ on a package of 20 cigarettes
through June 23, 2012. Beginning June 24, 2012, in addition to any other tax
imposed by the Act, a tax is imposed upon any person engaged in business as a
retailer of cigarettes at the rate of 50 mills per cigarette sold or otherwise
disposed of in the course of such business in this State (Section 2(a) of
the Act). Beginning June 24, 2012, the total of these rates is 99 mills per
cigarette or $1.98 for a package of 20 cigarettes.

i) The impact of these taxes is declared by the Cigarette Tax
Act to be imposed upon the retailer, with the taxes being required to be
prepaid or pre-collected by the distributor for the purpose of convenience and
facility only, and the amount of the tax shall be added to the price of the
cigarettes sold by the distributor. Collection of the tax shall be evidenced
by a stamp or stamps affixed to each original package of cigarettes, as
provided in the Act and in this Part.

j) It shall be the duty of each distributor to collect the tax
from the retailer at or before the time of the sale, to affix the required
stamps and to remit the tax collected from retailers to the Department of
Revenue (Department). Any distributor who shall fail to properly collect and
pay the tax imposed by the Act shall be liable for the tax.

k) The amount of the cigarette tax imposed by the Act shall be
separately stated, apart from the price of the goods, by both distributors and
retailers, in all advertisements, bills and sales invoices.

l) The taxes so imposed are in addition to all other occupation
or privilege taxes imposed by the State of Illinois, political subdivisions of
the State or by any municipal corporation.

m) All moneys received by the Department under the Act and the
Cigarette Use Tax Act from the additional tax of 50 mills per cigarette imposed
by PA 97-688 shall be paid each month into the Healthcare Provider Relief Fund (Section
2(a) of the Act).

n)Distributions

1) Cigarettes

Except for the
distributions provided for in subsections (b) and (m), all of the moneys
received by the Department pursuant to the Act and the Cigarette Use Tax Act,
other than the moneys that are dedicated to the Common School Fund, shall be
distributed each month as follows: first, there shall be paid into the General
Revenue Fund an amount that, when added to the amount paid into the Common
School Fund for that month, equals $29,200,000; then, from the moneys
remaining, if any amounts required to be paid into the General Revenue Fund in
previous months remain unpaid, those amounts shall be paid into the General
Revenue Fund; then from the moneys remaining, $5,000,000 per month shall be
paid into the School Infrastructure Fund; then, if any amounts required to be
paid into the School Infrastructure Fund in previous months remain unpaid,
those amounts shall be paid into the School Infrastructure Fund; then the
moneys remaining, if any, shall be paid into the Long‑Term Care Provider
Fund.

2) Little Cigars

Moneys
collected from the tax imposed on little cigars under Section 10-10 of the
Tobacco Products Tax Act of 1995 shall be included with the moneys collected
under the Cigarette Tax Act and the Cigarette Use Tax Act when making
distributions to the Common School Fund, the Healthcare Provider Relief Fund,
the General Revenue Fund, the School Infrastructure Fund, and the Long-Term
Care Provider Fund under Section 2 of the Cigarette Tax Act. (Section 2(a)
of the Act)